32 terms

Chapter 10 Money and Banking


Terms in this set (...)

anything that serves as a medium of exchange, a unit of account, and a store of value
medium of exchange
anything that is used to determine value during the exchage of goods and services; buying food with a money
the direct exchage of one set of goods or sevices for another
unit of account
a means for comparing the values of goods and services; comparison of $35 jacket at one store and $30 jacket at another store
store of value
something that keeps its value if it is stored rather than used; piggy bank
coins and paper bills used as money
commodity money
objects that have value in themselves and that are also used as money; chicken
representative money
objects that have value becuase the holder can exchage them for something else of value; silver certificate
fiat money
money that has value because the government has ordered that it is an acceptable means to pay debts; "legal tender"
an institution for receiving, keeping, and lending money
national bank
a bank chartered, or licensed, by the national government
bank run
widespread panic in which great numbers of people try to redeem their paper money
paper currency issued during the Civil War
gold standard
a monetary system in which paper money and coins are equal to the value of a certain amout of gold
Federal Reserve System
the nation's central banking system
central bank
bank that can lend to other banks in times of need
member bank
bank that belongs to the Federal Reserve System
Federal Reserve note
the national currency we use today in the United States
Great Depression
the severe economic decline that began in 1929 and lasted for more than a decade
the government agency that insures customers' deposits if a bank fails; Federal Deposit Insurance Corporation
money supply
all the money available in the United States economy
the ability to be used as, or directly converted to, cash
demand deposit
the money in checking accounts
money market mutual fund
a fund that pools money from small savers to purchase short-term government and corporate securities
fractional reserve banking
a banking system that keeps only a fraction of funds on hand and lends out the remainder
failure to pay back a loan
a specific type of loan that is used to buy real estate
credit card
a card entitling its holder to buy goods and services based on the holders's promise to pay for these goods and sevices
the price paid for the use of borrowed money
the amount of money borrowed
debit card
a card used to withdraw money
person or institution to whom money is owed